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Trump ‘can’t just tax French wine’

US President Donald Trump’s threat to impose tariffs on French wine in retaliation at plans for a tax on large digital firms would have to apply to all wines produced in the EU and  not just wine from France.

28 August 2019
By Connexion journalist

This is because wine exports to the US are governed by a treaty between the US and the EU.

Speaking before reports that France and the US were close to an agreement on the tax following talks at the G7 summit in Biarritz, a spokesman for the Conseil Interprofessionnel du Vin de Bordeaux said: “Nothing formal has been done by the US after Mr Trump’s comments.”

Mr Trump had threatened to hike tariffs in response to France’s plan to make firms like Google, Amazon, Facebook and Apple (known as GAFA) pay tax on France-generated revenue.

The GAFA giants had complained to the US Trade Representative’s office about the French plans, despite earlier shrugging off similar legislation passed by British MPs.

Wine experts also highlighted double taxation, at federal and state level, currently faced by Europe’s wines in the US – with some states’ anti-alcohol taxes dating back to prohibition.

Traditionally, France, Italy and Spain have been big wine exporters to the US.

France was the biggest exporter of wine in the world in 2017, with total exports estimated at €8.7billion.

Olivier Fleury, a Bordeaux winemaker and négociant, said: “It is not the first time we have had threats to tax our wine.”

But he admitted that taxes would hit hard in a market as price-sensitive as wine.

His Chateau du Pavillon wines sell for €12 to €60 in France and $18 to $60 in the US.

A doubling of US tariffs would add a few dollars to the price of each of the 250,000 bottles he exports there. “Bordeaux wines are just recovering in the US after years when they were hit by a number of factors, including the strong euro,” he said.

Mr Fleury said his American distributor in Illinois had not heard of any official action from the US. “We cross our fingers it will last,” he said.

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